Citation NR: 9625917
Decision Date: 09/16/96 Archive Date: 09/26/96
DOCKET NO. 95-00 232 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Buffalo,
New York
THE ISSUE
Entitlement to waiver of recovery of an overpayment of
nonservice connected pension benefits in the amount of
$1,440.
REPRESENTATION
Appellant represented by: Veterans of Foreign Wars of
the United States
ATTORNEY FOR THE BOARD
Debbie A. Riffe, Associate Counsel
INTRODUCTION
The veteran had active service from August 1943 to March
1946. This appeal arises from a March 1994 decision of the
Buffalo, New York Regional Officeís Committee on Waivers and
Compromises (RO), which denied the veteranís request for
waiver of recovery of an overpayment of nonservice connected
pension benefits in the amount of $1,440 on the basis that
recovery of the debt would not be against equity and good
conscience. In a revised decision in June 1994, the RO
determined that the request for waiver of recovery of the
overpayment remained denied.
CONTENTIONS OF APPELLANT ON APPEAL
It is contended that the request for recovery of an
overpayment of pension benefits should be waived as the
benefits were erroneously awarded based on an incomplete
application. It is contended that the veteran was not
capable of reading or filling out the application for
benefits. It is argued that the veteran was not even
partially at fault in the creation of the overpayment because
the debt would never have been incurred had the application
been properly processed. It is contended that the veteran
has not been unjustly enriched by the benefits because the VA
payments were turned over to the veteranís nursing home and
applied to his Medicaid payments.
DECISION OF THE BOARD
The Board, in accordance with the provisions of 38 U.S.C.A.
ß 7104 (West 1991 & Supp. 1995), has reviewed and considered
all of the evidence and material of record in the veteran's
claims file. Based on its review of the relevant evidence in
this matter, and for the following reasons and bases, it is
the decision of the Board that the evidence supports the
veteranís claim for waiver of recovery of nonservice
connected pension benefits in the amount of $1,440.
FINDINGS OF FACT
1. All relevant evidence necessary for an equitable
disposition of the veteranís appeal has been obtained by the
RO.
2. In his application for nonservice connected pension
benefits in June 1981, the veteran indicated that he was
married. In August 1991, the veteran reapplied for
nonservice connected pension benefits and did not fill out
the marital information section; subsequently, the RO did not
seek to obtain the marital information and any income
information of a spouse from the veteran.
3. The veteran was paid nonservice connected pension
benefits from September 1991 through December 1992.
4. In Improved Pension Eligibility Verification Reports
(EVR) submitted in November 1993, the veteran reported that
he was married and that monthly income from Social Security
and other sources for him and his spouse exceeded $1,200,
which is excessive for purposes of receiving VA pension
benefits.
5. For the period from September 1991 through December 1992,
the veteran was paid $1,440 in nonservice connected pension
benefits for a veteran residing at a Medicaid-approved
nursing home when he was due $0, thus creating an overpayment
of $1,440.
6. The veteran was at fault in the creation of the
overpayment by virtue of his failure to submit a completed
application informing the RO of his marital status and any
income from a spouse, but this fault is mitigated to a great
extent as the RO failed to seek the necessary marital and
income information after the incomplete application was
submitted.
7. Recovery of the debt would not deprive the veteran of the
ability to provide for life's basic necessities; failure to
repay the debt would not result in unfair gain to the
veteran.
8. Reliance on VA benefits did not result in relinquishment
of a valuable right or the incurrence of a legal obligation.
CONCLUSION OF LAW
Recovery of an overpayment of nonservice connected pension
benefits in the amount of $1,440 would be against equity and
good conscience. 38 U.S.C.A. ßß 5107, 5302 (West 1991); 38
C.F.R. ßß 1.963(a), 1.965(a) (1995).
REASONS AND BASES FOR FINDINGS AND CONCLUSION
The veteran's claim is well grounded within the meaning of
38 U.S.C.A. ß 5107(a). That is, he has presented a claim
which is plausible. All relevant facts have been properly
developed, and no further assistance is required to comply
with the duty to assist as mandated by 38 U.S.C.A. ß 5107(a).
I. Factual Background
The overpayment in this case was created as a result of the
fact that the veteran was paid nonservice connected pension
benefits on the basis that his countable income did not
exceed the maximum annual limit when, in fact, the veteranís
income was actually greater than what the RO had been led to
believe. The ROís Committee on Waivers and Compromises has
held that the veteran was partly at fault for the creation of
the overpayment because he failed to complete all marital
information, including his wifeís income and net worth, on
his application for pension.
A review of the record shows that the veteran submitted VA
Form 21-526, Veteranís Application for Compensation or
Pension, in June 1981. On the application, he indicated that
he was married and lived with his spouse. By letter in
September 1981, the RO notified the veteran that he was found
not to be eligible for pension benefits because his countable
annual income exceeded the annual income limits provided by
law. He was informed that he could reapply for benefits.
In July 1991, a letter was received from Frances Cheney, the
social service director of Harr-Wood Nursing Home, indicating
that the veteran had been admitted and was receiving nursing
care due to physical disabilities.
In August 1991, VA Form 21-526, Veteranís Application for
Compensation or Pension, was received. On the application,
the section on marital and dependency information was not
filled out, and there was no indication whether or not the
veteran was married. It was indicated that the veteran was
either hospitalized or received domiciliary care from January
1991. In the section on net worth of veterans and
dependents, $0 was indicated for the veteran and nothing was
indicated in the spaces provided for spouse. In the section
on receipt of income, it was indicated that the veteran
received Social Security benefits, and nothing was indicated
in the spaces provided for spouse. The veteran signed the
application with an ďxĒ, which was witnessed by two
individuals from the nursing home.
A Report of Contact form dated in August 1991 indicates that
the veteran was still a patient in the nursing home and the
home was Medicaid-approved. The veteran was admitted into
the home in January 1991 and his Medicaid coverage began at
that time.
By letter in September 1991, the RO notified the veteran that
he was awarded VA benefits in the amount of $90 per month
effective September 1, 1991. The RO indicated that the
benefits were for his incidental needs and that no part of
this payment should be used by Medicaid to cover your medical
expenses.
By letter in August 1993, the RO notified the veteran that
his pension payments were stopped effective September 1, 1991
because he had not submitted the income statement sent to him
recently. The RO stated that the termination resulted in an
overpayment of benefits. In August 1993, an Improved Pension
Eligibility Verification Report (EVR) for a veteran with no
dependents was submitted. The report indicated that the
veteran was married and not living with his spouse and that
he contributed $714 per month for his spouseís support. The
report was signed by the veteran with a mark, which was
witnessed by two individuals from the nursing home.
By letter in September 1993, the RO proposed to reduce the
veteranís pension payments from $90 to $53, effective
September 1, 1991, due to the veteranís failure to submit the
amount of medical expenses that he paid for his care. By
letter later in September 1993, the RO proposed to terminate
the veteranís pension payments, effective September 1, 1991,
due to evidence that he had a spouse and that his familyís
income or net worth had changed. The RO requested that the
veteran submit information regarding his spouse and income
for him and his spouse.
In September 1993, the veteranís wife submitted a letter,
indicating that the veteran was declared legally blind in
October 1991. She provided the doctorís name and address who
made this determination. She stated that she had received a
form from the VA in order to apply for outpatient treatment
for the veteran but that she did not return the form because
Medicare and Medicaid were paying for treatment. She stated
that she also desired to correct the error on the income
verification form which stated that she was estranged from
the veteran. She stated that they were separated due to
medical reasons.
In November 1993, a Declaration of Status of Dependents form
was received, indicating that the veteran was married. The
form was signed by the veteran with an ďxĒ, which was
witnessed by two individuals.
In November 1993, two EVRs for a veteran with a spouse were
received. The EVR which covered the period from September
1991 to August 1992 indicates monthly income from Social
Security for him and his spouse totaling $1,244.90. The EVR
which covered the period from September 1992 to August 1993
indicates monthly income from Social Security for him and his
spouse totaling $1,289.60. The EVRs indicate other income
from interest and dividends and IRA accounts. The veteran
signed the EVRs with a mark, which was witnessed by two
individuals.
In November 1993, the veteranís representative submitted a
letter, which is construed as a request for waiver of
overpayment, created from the erroneous of award of pension
benefits. He argued that multiple errors had been made for
which the veteran was not responsible. He stated that the
veteran was awarded a monthly pension based on an incomplete
application. He indicated that the pension payments were
turned over to the nursing home to be applied toward the cost
of care along with an additional contribution from the
veteranís and his wifeís Social Security awards.
By letter in December 1993, the RO notified the veteran that
his pension benefits were terminated, effective September 1,
1991, due to excessive income.
In February 1994, a financial status report was received.
The report indicates that the veteranís monthly income
exceeded his expenses by $93.61. With this report, two
forms, dated in November 1991, were received which reveal the
income of the veteran and his spouse. On the form reflecting
the veteranís income, a notation indicates that the veteranís
VA pension of $90 must be applied to his cost of care and
could not be considered available to the veteranís wife.
In March 1994, the RO denied the request for a waiver of
recovery of an overpayment in the amount of $1,440. The RO
determined that the creation of the overpayment was partly
the veteranís fault; that it would not be a financial
hardship to repay this debt; and that because he was never
entitled to the pension, the veteran would be unjustly
enriched if he did not repay it. In April 1994, a statement
indicating the veteranís disagreement with the decision of
the RO was received. In the statement, the veteranís
representative argued that all pension payments were turned
over to the nursing home and applied to Medicaid payments.
He contended that it was not the veteran who was unjustly
enriched but the Medicaid program which used VA payments to
offset its own payments.
In June 1994, the RO issued a revised decision and determined
that the veteranís request for waiver of recovery of the
overpayment remained denied. The RO indicated that the
veteran was not unjustly enriched by the pension payments and
that there would be no undue hardship for the veteran to
repay the debt. In July 1994, a statement indicating the
veteranís disagreement with this decision of the RO was
received. In the statement, the veteranís representative
stated that, taking into consideration the veteranís physical
and mental status at the time the pension application was
submitted, it is difficult to believe that the veteran
knowingly signed an incomplete form. He stated that the
veteran was now being required to reduce his assets on
account of anotherís mistakes.
II. Analysis
Initially, the Board must determine whether the debt was
properly created. A review of the record shows that the
veteran was paid $90 per month in nonservice connected
pension benefits from September 1991 through December 1992,
when his pension payments were suspended. On EVRs submitted
in November 1993, income from Social Security alone for the
veteran and his wife amounted to $1,244.90 per month for the
period of September 1991 to August 1992 and $1,289.60 per
month for the period of September 1992 to August 1993. The
total amounts do not take into account other monthly income
from interest and dividends and IRA accounts. This income
when annualized over 12 months clearly exceeds the maximum
annual limit. Thus, an overpayment was created in the amount
$1,440 for the period of September 1, 1991 to January 1,
1993. The record clearly shows that the veteran was paid VA
benefits on the basis that his income did not exceed the
maximum annual limit when, in fact, the veteranís income was
actually greater than what the RO had been led to believe.
Pursuant to 38 U.S.C.A. ß 5302(c), a finding of fraud,
misrepresentation or bad faith precludes a grant of a waiver
of recovery of the overpayment. The RO concluded that the
facts in this case do not show the presence of any of the
preceding factors and the Board will accept that conclusion.
As a result, the Board's decision on appeal will be limited
to the determination of whether or not waiver of recovery of
an overpayment of nonservice connected pension benefits is
warranted on the basis of equity and good conscience.
The RO has denied the veteran's claim for waiver on the basis
that recovery of the overpayment would not be against equity
and good conscience. 38 U.S.C.A. ß 5302; 38 C.F.R.
ß 1.963(a). The standard of "Equity and Good Conscience"
will be applied when the facts and circumstances in a
particular case indicate a need for reasonableness and
moderation in the exercise of the Government's rights. The
decision reached should not be unduly favorable or adverse to
either side. The phrase equity and good conscience means
arriving at a fair decision between the obligor and the
government. In making this determination, consideration will
be given to the following elements, which are not intended to
be all-inclusive:
1. Fault of the debtor. Whether the
actions of the debtor contributed to the
creation of the debt.
2. Balancing of faults. Weighing of the
fault of the debtor against that of the
VA.
3. Undue hardship. Whether collection
would deprive the debtor or family of
basic necessities.
4. Defeat the purpose. Whether
withholding of benefits or recovery would
nullify the objective for which benefits
were intended.
5. Unjust enrichment. Whether failure
to make restitution would result in
unfair gain to the debtor.
6. Changing position to one's detriment.
Whether reliance on VA benefits resulted
in relinquishment of a valuable right or
the incurrence of a legal obligation. 38
C.F.R. ß 1.965(a).
The record shows that the veteran applied for pension
benefits in June 1981 but was determined to be ineligible on
account of excessive income. On the application, he
indicated that he was married. The veteran reapplied for
pension benefits in August 1991. On the application, the
section on marital information was not filled out. There was
no subsequent RO inquiry as to the veteranís marital status,
and the veteran was awarded nonservice connected benefits in
September 1991. He received the benefits from September 1991
through December 1992, when his pension payments were
suspended. In August 1993, the RO stated that the payments
had stopped due to the veteranís failure to return income
verification forms. It was not until November 1993 that the
veteran submitted EVRs that covered the period from September
1991 to August 1993 and reflected income which was excessive
for receipt of pension. On his application for pension and
the EVRs, the veteran signed his name with a mark or ďxĒ
which was witnessed by others. The veteranís wife indicated
in a September 1993 letter that the veteran was declared
legally blind in October 1991. The veteranís representative
asserts that given the veteranís physical and mental status
at the time it would be difficult to believe that the veteran
knowingly signed the application in its incomplete form.
Based on a review of the entire record and having considered
all contentions, the Board concludes that the veteran was at
fault in the creation of the debt because he failed to submit
marital information, as requested, on his pension
application. The RO awarded benefits based on an incomplete
record of income. Moreover, the veteran apparently neglected
to return income information, as requested by the RO, until
November 1993. It is conceivable that the veteran could have
averted a part of the overpayment if marital and income
information had been furnished to the RO at an earlier time.
However, the veteranís fault is mitigated to a large extent
by the fact that the RO did not seek to obtain the marital
status of the veteran when the application for pension was
obviously incomplete. In fact, an earlier application for
pension was of record and would have supplied the RO with
some indication as to the veteranís marital status and
whether a spouse had any income. If the RO had sought the
needed information, it is entirely possible that the
erroneous award of pension would not have been made and the
overpayment would not have been created. It is also
noteworthy that the veteranís wife indicated that the veteran
was declared legally blind in October 1991, which is close in
time to the receipt of the veteranís pension application.
This medical disability, as well as the fact that the veteran
was placed in a nursing home and under care for physical
disabilities, might help to explain why the veteran signed
his name with marks and why he submitted an incomplete
application. As a consequence, the Board is not prepared to
hold that the veteran was solely at fault for the creation of
the overpayment in this particular case.
In addition, the Board must also consider whether recovery of
the debt would have resulted in financial hardship to the
veteran. The most recent information concerning the
veteran's assets, income and expenses was submitted in a
February 1994 financial status report. The monthly gross
income was $1,501.08, consisting of $987.22 from Social
Security benefits and interest income for the veteran and
$513.86 from Social Security benefits, annuities, IRA account
income, and interest income for the spouse. The total
monthly expenses were $1,407.47, including no rent or
mortgage payment, $160 per month for food, $266 per month for
utilities and heat, $241.20 per month for Medicare and
medical insurance, $40 per month for drug
prescriptions/dentist, $13.52 per month for garbage, $40 per
month for the church, $190.75 per month for land and school
taxes, $70 per month for homeowners and car insurance, $30
per month for miscellaneous house necessities, $106 per month
for gas, oil, registration and license for car, lawn mower
and snow blower or removal, $20 per month for papers and
magazines, $15 per month for AAA Club/ Legion dues, $40 per
month for emergency fund, $40 per month for miscellaneous
gifts, $100 per month for personal items, and $35 per month
for television and cable. The listed assets totaled $9,928
cash in the bank, $120 cash on hand, a vehicle, a life use in
real estate valued at $68,700, and $57,700 in annuities, IRA
accounts, life insurance. The net monthly income exceeded
the net monthly expenses by $93.61.
Based on the income and expense information of record, it is
concluded that the record does not demonstrate that recovery
of the debt would render the veteran unable to provide for
life's basic necessities. The financial status report shows
that his monthly income exceeds his expenses by $93.61.
Moreover, the veteran has substantial assets of $9,928 cash
in the bank, which could be used to repay the debt. In view
of the $93.61 a month surplus and bank assets, it has not
been shown that financial hardship would result upon recovery
of the overpayment. It is to be emphasized that this does
not mean that some sacrifice on the part of the veteran would
not be required; however, absent a finding that the ability
to provide for life's basic necessities would be endangered,
it may not be held that financial hardship would result.
Another factor to be considered is whether the recovery of
the overpayment would defeat the purpose for which the
benefits are intended. In this case, the purpose would not
be defeated as the veteran is not entitled to nonservice
connected pension benefits as his income was determined to be
in excess of the maximum annual limit.
Significantly, the Board finds that failure to make
restitution would not result in unfair gain to the veteran
because the pension payments were used to offset Medicaid
payments. If the veteran had not received the pension
benefits, the cost of his care would have been paid for
through the Medicaid program. The VA made erroneous payments
of benefits based on incorrect information which the veteran
failed to rectify; however, it cannot be stated that the
veteran actually benefited from the pension payments. From
the record, it appears that the Medicaid program benefited as
its payments were offset.
The Board must consider whether reliance on benefits resulted
in relinquishment of a valuable right or the incurrence of a
legal obligation. The veteran has not contended, nor does
the evidence show, that the veteran had relinquished a
valuable right or incurred a legal obligation in reliance on
his VA benefits.
In sum, it appears that a number of the elements to be
considered in determining whether recovery of the overpayment
would be against equity and good conscience supports the
veteran's claim for waiver. While there was fault on the
part of the veteran, there was also fault on the part of the
VA which approaches that of the veteranís. Although
repayment of the debt would not place the veteran at risk in
his attempts to provide for basic necessities of life and
recovery of the overpayment would not defeat the purpose of
the intended benefits, it has been convincingly argued that
the veteran was not unjustly enriched by the pension
benefits. The RO also determined that the veteran was not
unjustly enriched. Under the circumstances, it is felt that
the evidence is at least in equipoise in this case and giving
the veteran the benefit of the doubt, waiver should be
granted.
ORDER
Waiver of recovery of an overpayment of nonservice connected
pension benefits in the amount of $1,440 is granted.
C.W. SYMANSKI
Member, Board of Veterans' Appeals
The Board of Veterans' Appeals Administrative Procedures
Improvement Act, Pub. L. No. 103-271, ß 6, 108 Stat. 740, 741
(1994), permits a proceeding instituted before the Board to
be assigned to an individual member of the Board for a
determination. This proceeding has been assigned to an
individual member of the Board.
NOTICE OF APPELLATE RIGHTS: Under 38 U.S.C.A. ß 7266 (West
1991 & Supp. 1995), a decision of the Board of Veterans'
Appeals granting less than the complete benefit, or benefits,
sought on appeal is appealable to the United States Court of
Veterans Appeals within 120 days from the date of mailing of
notice of the decision, provided that a Notice of
Disagreement concerning an issue which was before the Board
was filed with the agency of original jurisdiction on or
after November 18, 1988. Veterans' Judicial Review Act,
Pub. L. No. 100-687, ß 402, 102 Stat. 4105, 4122 (1988). The
date which appears on the face of this decision constitutes
the date of mailing and the copy of this decision which you
have received is your notice of the action taken on your
appeal by the Board of Veterans' Appeals.
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